Broadcom Ltd

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AVGO : NASDAQ : Technology
$210.41 up 2.23 | 1.07%
Today's Range: 206.8201 - 210.41
Avg. Daily Volume: 2918100.0
02/17/17 - 4:00 PM ET

Financial Analysis


BROADCOM LTD's gross profit margin for the fourth quarter of its fiscal year 2016 is essentially unchanged when compared to the same period a year ago. Even though sales increased, the net income has decreased, representing a decrease to the bottom line. BROADCOM LTD has strong liquidity. Currently, the Quick Ratio is 1.71 which shows the ability to cover short-term cash needs. The company's liquidity has decreased from the same period last year.

At the same time, stockholders' equity ("net worth") has greatly increased by 300.76% from the same quarter last year. The key liquidity measurements indicate that the company is unlikely to face financial difficulties in the near future.

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Income Statement Q4 FY16 Q4 FY15
Net Sales ($mil)4136.01840.0
EBITDA ($mil)1621.0793.0
EBIT ($mil)921.0543.0
Net Income ($mil)-632.0429.0


Balance Sheet Q4 FY16 Q4 FY15
Cash & Equiv. ($mil)3097.01843.0
Total Assets ($mil)49966.010592.0
Total Debt ($mil)13642.03949.0
Equity ($mil)18892.04714.0


Profitability Q4 FY16 Q4 FY15
Gross Profit Margin63.364.51
EBITDA Margin39.1943.09
Operating Margin22.2729.51
Sales Turnover0.260.64
Return on Assets-3.4812.87
Return on Equity-8.6429.5
Debt Q4 FY16 Q4 FY15
Current Ratio2.313.37
Debt/Capital0.420.46
Interest Expense106.041.0
Interest Coverage8.6913.24


Share Data Q4 FY16 Q4 FY15
Shares outstanding (mil)398.28276.26
Div / share0.510.42
EPS-1.441.64
Book value / share47.4317.06
Institutional Own % n/a n/a
Avg Daily Volume2896079.02687154.0

Valuation


HOLD. The current P/E ratio is negative, which has no meaningful value in the assessment of premium or discount valuation, it simply displays that the company has negative earnings. For additional comparison, its price-to-book ratio of 4.39 indicates a premium versus the S&P 500 average of 2.94 and a premium versus the industry average of 4.36. The price-to-sales ratio is well above both the S&P 500 average and the industry average, indicating a premium. Upon assessment of these and other key valuation criteria, BROADCOM LTD seems to be trading at a premium to investment alternatives within the industry.


Price/Earnings
1 2 3 4 5
premium   discount
  Price/Cash Flow
1 2 3 4 5
premium   discount
AVGO NM Peers 27.92   AVGO 24.31 Peers 16.24

Neutral. The absence of a valid P/E ratio happens when a stock can not be valued on the basis of a negative stream of earnings.

AVGO's P/E is negative making this valuation measure meaningless.

 

Premium. The P/CF ratio, a stock’s price divided by the company's cash flow from operations, is useful for comparing companies with different capital requirements or financing structures.

AVGO is trading at a significant premium to its peers.

 
Price/Projected
Earnings
1 2 3 4 5
premium   discount
  Price to
Earnings/Growth
1 2 3 4 5
premium   discount
AVGO 13.79 Peers 20.11   AVGO NA Peers 1.64

Discount. A lower price-to-projected earnings ratio than its peers can signify a less expensive stock or lower future growth expectations.

AVGO is trading at a significant discount to its peers.

 

Neutral. The PEG ratio is the stock’s P/E divided by the consensus estimate of long-term earnings growth. Faster growth can justify higher price multiples.

Ratio not available.

 
Price/Book
1 2 3 4 5
premium   discount
  Earnings Growth
1 2 3 4 5
lower   higher
AVGO 4.39 Peers 4.36   AVGO -177.34 Peers 0.99

Average. A lower price-to-book ratio makes a stock more attractive to investors seeking stocks with lower market values per dollar of equity on the balance sheet.

AVGO is trading at a valuation on par with its peers.

 

Lower. Elevated earnings growth rates can lead to capital appreciation and justify higher price-to-earnings ratios.

However, AVGO is expected to significantly trail its peers on the basis of its earnings growth rate.

 
Price/Sales
1 2 3 4 5
premium   discount
  Sales Growth
1 2 3 4 5
premium   discount
AVGO 6.26 Peers 4.74   AVGO 94.02 Peers 18.87

Premium. In the absence of P/E and P/B multiples, the price-to-sales ratio can display the value investors are placing on each dollar of sales.

AVGO is trading at a significant premium to its industry.

 

Higher. A sales growth rate that exceeds the industry implies that a company is gaining market share.

AVGO has a sales growth rate that significantly exceeds its peers.

 

 

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